Inasmuch as we are part of nature we are also perfect; it is our humanity that is imperfect. And, ironically, because of our capacity for imperfection and error we are free beings - a freedom that no stone or animal can enjoy. Without the possibility of error and real indeterminacy implied by the quantum theory, human liberty is meaningless.
The God that plays dice has set us free.

-Heinz R. Pagels

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It has been a while since I have written. I have so much to tell. So many stories. Some have been written, some are being written, and some will be written.

There are a couple of articles that I find interesting to read:

Malcolm Gladwell’s expose of Sidney Weinberg is an excellent read. Remember, there is no greater gift in the universe than adversity. We have all had our share. Adversity is a guest in my life. I am able to embrace it because I know that the only one that can beat me is me. I feel blessed at the adversity that I have been gifted. It has helped me go places and see things that many have not.

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Michael Lewis is one of my favorite writers. His piece, The End, hits the nail on the head. As I stated in my post from September 22nd, Investment Banking as we know it is over. Lights out. Game over.

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As an update to my positions, I have bearish bets on many commercial REIT names. My favorite shorts are Alexandria Real Estate Equities Inc. (ARE) and HCP, Inc. (HCP). Both are houses of cards, just like Prologis (PLD). The cluelessness of everyone involved in these names is amazing and so beautifully opportunistic. NO ONE seems to have a clue as to what is happening in this sector. No one except myself and my collaborator at The Tinker Factory.

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Where am I bullish? Gold.

In a conversation with some of my collaborators last night, I heard the most prescient comment:
In hard times, people want to own dollars. In harder times people need to own gold. I am very very very bullish on the yellow metal (GLD), and I continue to build my bullish position.

Peace

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Where is no one looking right now? Why is no one talking about something? I am away at my coastal office and I can’t get the yellow metal off my mind. There is something going on and everyone I talk to says “I don’t know how they are doing it. Nobody knows.”

I am starting to smell a huge, massive, uncontrollable bullish move somewhere. Not only that, the volatility is cheap cheap cheap. Why is it cheap? Because nobody is looking at it. When they start to, volatility will expand real quick.

How is gold being held down? Recently, it was at all time highs when viewed against the other major currencies. How is it being held down? More important, how is it being held down against the US dollar? Nobody knows. Nobody knows.

If whatever they are doing to hold it down starts to reverse, you could see the yellow metal double or triple in the matter of a month.

I don’t know how they are holding it down. But they are. And if the manipulation they are engaging in starts to reverse, they’ll be caught red handed.

Caught trying the oldest trick in the book.

Peace

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Probe of Lehman collapse escalated: report

This collapse was easy to see and I have written on if extensively in other forums.

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On to other things…I want to tell you about my pal, Ida. Ida is a golfer. She took up golf in her forties. Ida has 11 hole in ones. Quite a large number for a golfer. She is 97. I can hear her now saying….”I’m gonna get one more.”

The other night I finally asked her. How do you do it? How do you get so many?

She says, “oh, you just hit it down the middle, say a few hail marries, and it goes in the hole.”

That rang familiar with what I wrote here. Dream it, see it, do it, repeat.

While I am away, take some time to read one of my all time favorites. Bobby Evans definitely has a place in the volatilist hall of fame. He was optioning movie scripts that didn’t even exist while head of Paramount. He created a derivative market in the movie industry. What an unbelievable story. It also translates well to film. I am looking forward to having lunch with Bobby.

Peace

Bobby Evans

Below is a graphic of the cycle of market psychology.  It is my opinion that we are still in the denial phase.  There are many asset classes that I am bullish on.  Gold and Treasuries are two.  I am not bullish on US equities.  In my view there is more downside to come and we may be only half way through this decline.

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